How Grand Theft Auto IV Threatens The Wii

BURLINGAME, CALIF. – Since the launch of the Nintendo Wii videogame console in November of 2006, the Japanese videogame company had not missed a beat. That is, until the release of Grand Theft Auto IV this week.

Analysts are predicting that Take-Two Interactive Software (nasdaq: TTWO news people ) will make $400 million this week on sales of 6 million copies of the crime-drenched videogame. Microsoft (nasdaq: MSFT news people ) is eager to exploit the game, paying $50 million in advance royalties for the right to release exclusive content online. The title also promises to revive interest in the Playstation 3 gaming console, with game critics saying the game looks sharper on Sony‘s (nyse: SNE news people ) console. But the game is a bust for Nintendo (other-otc: NTDOY.PK news people ): not a single copy of the game will be played on the Nintendo Wii.

There’s more to come: “It’s one of a series of good games that will each convince consumers that there is a lot of good content on the other two boxes,” Wedbush Morgan analyst Michael Pachter says.

How many gaming consoles do you need? Could Grand Theft Auto IV put a chink in the Wii’s armor? Or will the Nintendo Wii continue to stomp the Playstation 3 and XBox 360? Share your thoughts in our Reader Comments section below.

Early on, some industry analysts predicted trouble for Nintendo (other-otc: NTDOY.PK news people ): The Wii had a relatively pokey processor, it lacked a hard drive, its controls were unusual. Two years ago, developer Chris Hecker took those whispers into the open, when he uncorked a rant at the Game Developers Conference in San Francisco, claiming the Wii was nothing more than a pair of Gamecubes held together with duct tape. (At least he picked the right venue: The session was called “Burning Mad: Game Developers Rant”.) Hecker has since apologized, and his personal Web site says of the matter “please don’t ask me about it, thanks.”

Yet even though the Wii seemed to lack the muscle that so many other gaming platforms hoped to build up, plenty of consumers fell in love with the console. In a relatively short time, the Wii elevated Nintendo from worst to first in the game console market. Wii sales in the United States now outstrip the combination of Sony‘s (nyse: SNE news people ) Playstation 3 and Microsoft‘s (nasdaq: MSFT news people ) XBox 360. Since releasing the Wii, Nintendo shares have surged more than 165%.

Even game developers who once spurned the Wii have reversed course and are now pumping out Wii titles. Microsoft is reportedly even developing a motion-sensitive knockoff of the Wii’s controller. That, no doubt, will make it easier to port some of the flurry of games built for the Wii to the XBox.

The problem is, it could get tougher and tougher to go the other way. It’s hard to imagine how the sprawling world of Grand Theft Auto IV–which already taxes the multicore processors powering the XBox and Playstation–could be recreated on the Wii. Bloggers have caught on, some complaining about the plethora of bad games for the platform.

The advantages of the Playstation 3 and Xbox 360 go beyond just rich, immersive games. “If [gamers] care more about high-definition, or they care about online, or they care about more graphically rich immersive games, they’re going to consider a 360 or Playstation 3,” Pachter asserts.

Sony’s victory in the next-generation videodisc format wars is a formidable advantage, Pachter argues. Grab a high-definition television at Best Buy (nyse: BBY news people ), and the salespeople will recommend that consumers–even non-gamers–buy Sony’s console so that they can play high-definition movies on their new displays. “That’s going to move consoles, maybe not today, but it will cumulatively over time,” Pachter says. (See: How To Get the Best (and Cheapest) BluRay Player.)

Microsoft, meanwhile, has invested heavily to create a best-in-class online experience to hook gamers.

By contrast, Nintendo’s online experience is safe, yet spartan. That means Microsoft’s deal with Take-Two for exclusive online content is just the start. “They’re certainly not stupid, they’re going to push online content like you wouldn’t believe,” Pachter says.

Wii won’t die, for sure. But Grand Theft Auto IV may have just given a new lease on life to the Playstation 3.

How many gaming consoles do you need? Could Grand Theft Auto IV put a chink in the Wii’s armor? Or will the Nintendo Wii continue to stomp the Playstation 3 and XBox 360? Share your thoughts in our Reader Comments section below.


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